If actual direct material costs are greater than standard direct materials costs, it means that
A)actual costs were calculated incorrectly.
B)the actual unit price of direct materials was greater than the standard unit price of direct materials.
C)the actual unit price of raw materials or the actual quantities of raw materials used was greater than the standard unit price or standard quantities of raw materials expected.
D)the purchasing agent or the production foreman is inefficient.

Question

Quizplus · Accepted Answer

When the actual direct material costs are greater than standard direct materials costs, it means that either the actual unit price of raw materials or the actual quantities of raw materials used was greater than the standard unit price or standard quantities of raw materials expected. It could be due to numerous factors including faulty materials, inefficient production practices or over-usage of materials. So, option C is the best choice.

If Actual Direct Material Costs Are Greater Than Standard Direct